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More on Using Credit

In the last post, I introduced the possibility of credit cards to young people. Most recently graduated are excited about making money and acquiring a credit card. Unfortunately, many of them do not realize how to use credit properly. There are many Americans who can attest to this fact.

Misuse of credit has led many down the path to bankruptcy. As with anything, you should be able to plan and in order to plan, you must be able to see the “big picture.” Again, it is a matter of perspective and young people of only 18 or 20 years of age may lack the vision to see how they should use credit appropriately. More importantly, they may be unable to see the trap they are falling into if they don’t know how to use credit.

The ugliest thing about credit is how easily anyone can get into trouble with the improper use of credit cards or other revolving credit. Like becoming overweight, some individuals who are using credit inappropriately do not realize they are in trouble until it might be too late. Then they are in that position of making only the minimum payments, not realizing it will literally take 15 or more years to make the payoff.

When you are making good money, you need to pay the debt as quickly and as well as you can. This is important because in these times, you don’t know when bad times will befall you. The unfortunate thing about “bad times” is that once they happen to you, the problems can multiply before you know it.

Some who have fallen on bad financial times have resorted to opening new credit card accounts to make the payments on their original cards. This is not a good practice and always seems to lead to even harder times for those who think this is the way out of debt.

Some believe the best way to handle their finances is to never take on debt. This might be an admirable goal, but in this modern era, you simply must have a credit card account of some type. If you don’t have a credit card, you will not be able to rent a car, purchase plane tickets, and a multitude of other things that require the use of credit cards to serve as an alternate form of identity in addition to paying for goods or services.